| Question |
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Why did Countrywide stop offering 100% financing on their mortgage loans?
As of March 12th. They now require 5% down. Is it because banks are underwriting to many garbage loans?
Losses how? No vague or arbitrary statements please.
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| By
Gary N |
Posted on
03/12/07 Total Answers
7 |
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| Answers- |
| Yes. There are too many losses for the financial institutions at100% financing. |
| Answer by :
DaveFrisch On Date
2007-03-12 11:55:12 |
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| There are no longer any investors purchasing the seconds on these deals due to poor perfomance. Because of that we all lost the ability to do them. Some of us are not capped at 90 ltv.....and it hurts!!! :) |
| Answer by :
queenvwr On Date
2007-03-12 11:59:43 |
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| this company are CONs. I think they are getting into trouble for loans they wrote before. these jerks approached me with a HELOC two years ago, telling me my home is worth 230k i took it out. while now that value is 195k. Now i am upside down. I talked to an appraiser he told me the home should of never appraised more than 195k back then and showed me comps to back it up. don't even bother with these crooks |
| Answer by :
josh m On Date
2007-03-12 12:03:17 |
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| They will loose money on a foreclosure if the home decreases in value. They are covering themselves. Also, people with nothing to loose default on loans more then the rest of us. |
| Answer by :
Janet P On Date
2007-03-12 12:06:25 |
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| This is something that is happening industry-wide. Subprime lenders are tightening up their guidelines. Either they're raising their requirements for 100%, or cutting it out entirely. |
| Answer by :
togashiyokuni2001 On Date
2007-03-12 12:17:27 |
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| Go to http://www.mortgageimplode.com
You can read dozens of stories of the many companies that are going under or losing amazing amounts of money right now.
The entire subprime and Alt-A (stated income, or 100% financing) markets are in the middle of a massive collapse. Default rates are several multiples over what they anticipated, and it is bankrupting some big companies right now. One single bank, HSBC, recently put aside over $10 BILLION dollars in loss reserves to cushion the blow from their subprime lending activities. One bank, $10 billion in losses.
So right now, everything is going to get tightened up dramatically, until the bleeding stops. Eventually, the cycle will turn around, banks will start lending like they're stupid again, and they'll lose money all over again. But this one could take 2-3 years to turn around, since there's over $1 trillion dollars worth of ARM loans scheduled to adjust over the next 12-18 months. Defaults are already sky-high BEFORE these ARM's are adjusting. It will get much worse when these ARMs do adjust and there's no one out there to refinance them anymore.
It's a pretty crazy time to be in this industry right now, but eventually, as always, things will settle down. I just believe we are not even close to the bottom yet, before it turns around. |
| Answer by :
Yanswersmonitorsarenazis On Date
2007-03-12 12:53:37 |
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| I don't think they stopped offering 100% in general. The market is changing and many people are defaulting on their payments, specifically the sub-prime and alt-a folks.
Like the poster above said, the mortgage companies are becoming more restrictive with whom they will allow 100% financing. I believe if you have good credit, you will still be able to qualify for 100% financing. |
| Answer by :
tygger On Date
2007-03-12 13:39:15 |
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